Accessibility links

Breaking News

Oil Prices Hit Record High $140.05 a Barrel

World crude oil prices have hit a new record high after the head of OPEC predicted that prices will rise more than 20 percent in the next few months.

Prices rose above $140 a barrel in Thursday's trading, but eased downward to settle at $139.53. Earlier, the president of the Organization of Petroleum Exporting Countries, Chakib Khelil of Algeria, told an interviewer from France 24 television that oil prices might reach $150 to $170 a barrel.

The OPEC chief said the weak U.S. dollar and instability in the Middle East are factors in oil's rapid price rise, but he blamed speculative trading for most of the increase in prices. He did say he thinks a price of 200 dollars per barrel is out of reach.

Khelil, who is Algeria's mining and energy minister, said OPEC is ready to meet rising demand for crude oil in the future.

Some economists are taking a close look at recent reports from the U.S. and OPEC about future demand for oil.

On Wednesday, the U.S. Energy Information Administration predicted that demand for fossil fuels including oil will persist, and it forecast oil prices of up to 186 dollars a barrel by 2030 - with much of the oil still coming from OPEC.

A recent report by the producers' group, however, predicted a decline in demand for oil, due to a growing reliance on biofuels and increasing production by countries that are not OPEC members.

Some economists say the disagreement is critical because it will influence how much OPEC invests in developing new oil supplies. A report in London's Financial Times indicates OPEC's predictions may already be having an impact. The newspaper says Saudi Arabia and some other nations already have postponed plans to increase production capacity.

Some information for this report was provided by AFP, AP and Bloomberg.